Friday, 21 August 2015

The Maestro's Movers: Neil Woodford's Big Buys and Sells in July 2015

In general I do not "follow" any particular investor's activities. However, there are a couple that I have followed of sorts because I like their investment style. One of them is Neil Woodford

I watch Woodford's fund quite carefully to get some ideas. In particular, doing this with Woodford is extremely easy as--I am sure many of you know this--he publishes the entire breakdown of his fund each month. A very unusual action.

Since launch I have been assiduously collecting this data and building a little spreadsheet to see how things are changing. I've realised that this work--which is not a tiny amount--may be of interest to some of you.

So here I will offer a little breakdown of the companies that Woodford has bought and sold in July 2015.

Methodology

First, a little on my methodology. Woodford provides two bits of information each month which I use for this:

The total value of all the assets in his fund (this month, £6.74 billion);

The percentage weight each company has within the fund.

Using this information, I do a couple of things:

Work out the value of the company holding (dividing the fund size by the company's weight)

Using the share price on the day the snapshot of the fund was taken, I work out how many shares (approximately) Woodford holds in the company.

Now this provides an estimate of his shareholding in each company from month to month. It can then be used to work out what his big movers were during the month.

*I am a little confused by the P2P Global holding this month. The company is mentioned several times with--as far as I can tell--the same share class. This figure is, therefore, almost certainly drastically incorrect.

Woodford's Moves

Quite a month this month. It looks like there has been a lot of purchasing (and little selling) going on. This is little surprise considering the month saw most markets dip markedly.

The most notable changes this month seem to have been in the FTSE 100. Some massive names have seen some massive purchases. Legal & General, Rolls Royce and BT all saw 20% growth in the portfolio. Indeed, in the case of Rolls Royce and Legal & General it appears I echoed Woodford's particular buys this month with two myself.

We also see Woodford beefing up his holding in the FTSE 250 reinsurer, Lancashire, after a 15% growth in June with another 34% growth in July.

On the sell front, the most striking sale was that of Royal Mail. it is most likely no coincidence that the ex-dividend day and payment date came in July.

Some Caveats

Obviously, as with everything on this site, this list is not meant to be advice on what to buy (or sell). Also, these figures are all created from different levels of estimated data.

The weightings are rounded as is the fund value. Share holdings are therefore estimations rather than certain figures and--as a consequence--my calculations on their changes are not supposed to be seen as 100% accurate. Of course, at this final stage (that is, the write-up) there is also an additional rounding of the percentage changes.

Also, because of the way I collate the data it does mean that full sales of holdings will likely be missed. If you notice any, give me a heads up in the comments section below. For example, this month the Essentra position appears to have been sold out of.

Finally, remember this is an open-ended fund and so has cash flowing in and out of it constantly. As a result, for those companies Woodford particularly favours--if he wishes to keep them at a similar weighting--then each month would show a growth in his shareholding in them. what this means for the true nature of the purchase (confidence, consistency, or whatever) is up to you!

As usual, Do Your Own Research (DYOR)!

What do you think?

What do you think of some of Woodford's big movers? Did you make similar purchases/sells in July? Has the list got you thinking about any of the companies listed?

Not entirely sure about the share classses either, but I'm aware there was a recent fund raising/share issue by P2P, and I'm pretty sure Woodford took a significant stake in the issue. As I understand it the previous c shares were also converted to ordinaries...so might explain?

Yes, there is a C class. And, as you state, they seem to be converted to ordinaries. However, both classes are included in Woodford's breakdown which is a little confusing! I will try and fathom it sometime or else it may become clearer with next month's breakdown! We will see!

Thanks for dropping by with a possible explanation. Whatever the situation, it certainly looks as though he has built up his stake quite significantly.

I was thinking about p2p lending quite a lot recently. Was thinking that it's almost becoming a normal thing... If banks aren't lending to businesses, or at least not at sensible rates, then this method will only grow.

Was also thinking what impact the maybe soon coming interest rate rise will have on lending...

I feel like it will be positive, perhaps spark even more competitive rates? Woodford is obviously a fan...

Yes, it is an interesting sector. It will be quite fascinating to see how it responds to a new interest rate environment. I think that it has become entrenched and mature enough by now for it to handle it rather well. As a consequence, it has a number of adherents (me included) who have had a good enough experience over the long-term not to desert it entirely!

Woodford's approach to investing in the market seems quite a good one. I have looked at P2P Global before and do find it attractive. I may make a dip in there myself, although direct investing certainly has its benefits!

No worries, weenie. It is interesting to look through, isn't it! That is one danger of compiling a list like this. It is only a short jump to copying Woodford which--although perhaps not the worst decision--is not a great investment choice long-term!

I agree, investing directly is certainly highly attractive. P2P Global does have a reach, though, which I could never get from my own investing. So definitely one to consider dipping a toe into, I think!